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Thousands underpaid state pension: Check now

Paloma Kubiak
Written By:
Paloma Kubiak

Nearly double the number of people have been underpaid state pension than originally estimated. We list the likely retirees who should check their state pension payments.

An estimated 134,000 people – mainly women – were identified as having been underpaid state pension to the tune of £1bn. These numbers were included in the Department for Work and Pensions (DWP) annual report for 2020/21.

However, the latest annual report for 2021/22 includes a stark revision to the numbers. The DWP update revealed the number of people affected by errors is closer to 220,000, and the bill will run to £1.3bn.

‘Underpayment correction costs to soar’

The revelation comes just months after former pensions minister, Steve Webb, who is currently partner at pension consultancy Lane, Clark and Peacock exposed six further state pension blunders.

And according to Webb, the annual report admits for the first time to an error whereby credits for time at home with children – known as home responsibilities protection – may be missing from people’s National Insurance records.

These credits are important and can affect state pension entitlement. Again, the majority of those affected are women.

Webb first raised this issue with DWP in 2008 and a correction exercise was undertaken which resulted in a £35m refund. However, DWP have now admitted ongoing problems are being investigated with HMRC, with the potential number of people affected and estimates of cost likely to be published in autumn 2022 at the earliest.

Webb said: “DWP’s annual report reveals a shocking level of error in state pension payments.  Not only is the cost of the underpayment correction exercise set to soar, DWP are now admitting a whole new category of errors.  In both cases it is women who will bear the brunt of the errors.  We need much greater transparency about all of this rather than leaving it to figures buried in the small print of annual reports. Far too many people have been underpaid for far too long.”

Could you be affected by state pension underpayments?

There are three main groups affected, according to Webb. DWP are now checking hundreds of thousands of records. But if you fall into any of these groups, you may have been underpaid and can get in touch with the government’s Pension Service to query the amount:

  • People aged over 80 who should automatically get a pension of £85 per week, regardless of NI record; anyone over 80 and getting less than this needs to chase it up.
  • Widows whose state pension did not change when their husband died.
  • Married women whose husband turned 65 after 17 March 2008, and who are currently on less than £85 per week.

Imogen Lea, tax and trust consultant at Wilsons Solicitors, added that widows whose pension was not increased when their husband was still alive should also check. This applies if they hit the state pension age before April 2016 and got less than 60% of their husband’s basic state pension while he was still alive.

She added that for any women aged 80+, whether they’re married, widowed, divorced or single, if they get a state pension of less than £80.45 a week, they should question this.

Further, divorced women who could or should have benefitted from the ex-husband’s National Insurance record should revisit their payments to see if they’ve been underpaid.

And the heirs of a woman who was underpaid state pension while alive and has since died should also check.

Webb added that others who should check are mainly mothers who had time at home with their children which was never credited to their National Insurance account. However, women who were paying the ‘married woman’s stamp’ are not eligible.

You can go online to check your National Insurance record and if there is time post-1978 (when the system came in) when you were getting child benefit but which is showing as ‘not full’ then this is worth looking into, Webb added.